Investors have been too quick to assume that the financial markets are on the mend

SHOOT: Dubai is just one signal that toxic debt is still circulating in the world economy.

clipped from news.yahoo.com NEW YORK – Stocks tumbled Friday as fear swept world markets that financial trouble in the Middle Eastern city-state of Dubai will upend a global economic recovery. Investors are worried that a default by a government investment company in Dubai over $60 billion in debt payments could have a ripple effect in world financial markets. The fear is that losses in the small emirate, which has drawn wealthy tourists from around the globe in the past decade with its Las Vegas-in-the-Middle East appeal, could imperil a nascent economic rebound. "I think this is a sign of things to come," said Dave Rovelli, managing director of trading at brokerage Canaccord Adams in New York. "Commercial real estate continues to go lower. People are going to continue to default on debt payments." "We're way ahead of ourselves in this market. We're in the eye of the storm now and we've been in it since March," he said. "Now we're in the back end of the storm."